(4) “Capital expenditure”
means an expenditure for the plant or equipment which is not properly
chargeable as an expense of operation and maintenance and includes acquisition
by purchase, donation, leasehold expenditure, or operating lease which
is treated as capital expense in accordance to the accounting standards established
for lease expenditures by the Financial Accounting Standards Board,
calculated over the length of the lease for plant or equipment, and includes
assets having an expected life of at least three years. A capital
expenditure includes the cost of studies, surveys, designs, plans, working
drawings, specifications and other activities essential to the acquisition,
improvement, expansion, or replacement of the plant and equipment.

Sec. 2. 18 V.S.A. § 9439(b) is amended to read:

(b) When a letter of intent
to compete has been filed, the review process is suspended and the time within
which a decision must be made as provided in subdivision 9440(c)(2)9440(d)(4)
of this title is stayed until the competing application has been ruled complete
or for a period of 55 days from the date of notification under subdivision 9440(b)(4)9440(c)(8) as to the original application, whichever is shorter.

Sec. 3. 18 V.S.A. § 9440(c)(6) is amended to read:

(6) If an applicant fails to
respond to an information request under subdivision (4) of this subsection
within six months or, in the case of review cycle applications under section
9439 of this title, within such time limits as the commissioner shall establish
by rule, the application will be deemed inactive unless the applicant has,
within said six months, filed an adequate, as determined by the
commissioner, amended letter of intentrequests in writing that the
application be reactivated and the commissioner grants the request.
If an applicant fails to respond to an information request within 12 months or,
in the case of review cycle applications under section 9439 of this title,
within such time limits as the commissioner shall establish by rule, the
application will become invalid unless the applicant requests, and the
commissioner grants, an extension.

Sec. 4. 18 V.S.A. § 9440(c)(9) is amended to read:

(9) The health care
ombudsman’s office established under section 4089jsubchapter 1A of
chapter 107 of Title 8 or, in the case of nursing homes, the long-term care
ombudsman’s office established under section 7502 of Title 33, is authorized
but not required to participate in any administrative or judicial review of an
application under this subchapter and shall be considered an interested party
in such proceedings upon filing a notice of intervention with the commissioner.

Sec. 5. 18 V.S.A. § 9440(d)(4) and (7) are amended to
read:

(4) A review shall be
completed and the commissioner shall make a final decision within 120 days
after the date of notification under subdivision (b)(4)(c)(4) of
this section. Whenever it is not practicable to complete a review within
120 days, the commissioner may extend the review period up to an additional 30
days. Any review period may be extended with the written consent of the
applicant and all other applicants in the case of a review cycle process.

(7) Notice of the final
decision shall be sent to the applicant, competing applicants, and interested
parties. This noticeThe final decision shall makeinclude
written findings and conclusions stating the basis of the decision.

Sec. 5a. 18 V.S.A. § 9440(e) is amended to read:

(e) The commissioner shall
adopt rules governing procedures for the expeditious processing of applications
for replacement, repair, rebuilding, or reequipping of any part of a health
care facility or health maintenance organization destroyed or damaged as the
result of fire, storm, flood, act of God, or civil disturbance, or any other
circumstances beyond the control of the applicant, and of applications where
the health care facility is affected by bankruptcy proceedings, where the
commissioner finds that the circumstances require action in less time than
normally required for review. If the nature of the emergency requires it, an
application under this subsection may be reviewed by the commissioner only,
without notice and opportunity for public hearing or intervention by any party.

Sec. 5b. 18 V.S.A. § 9440(g) is added to read:

(g) If the commissioner
has reason to believe that the applicant has violated a provision of this
subchapter, a rule adopted pursuant to this subchapter, or the terms or
conditions of a prior certificate of need, the commissioner may take into
consideration such violation in determining whether to approve, deny, or
approve the application subject to conditions. The applicant shall be
provided an opportunity to contest whether such violation occurred, unless such
an opportunity has already been provided. The commissioner may impose as a
condition of approval of the application that a violation be corrected or
remediated before the certificate may take effect.

Sec. 5c. 18 V.S.A. § 9445(d) is added to read:

(d) The commissioner shall
adopt by rule criteria for assessing the circumstances in which a violation of
a provision of this subchapter, a rule adopted pursuant to this subchapter, or
the terms or conditions of a certificate of need require that a penalty under
this section shall be imposed, and criteria for assessing the circumstances in
which a penalty under this section may be imposed.

Sec. 5d. 18 V.S.A. § 9440(c)(5) is amended to read:

(5) An applicant seeking
expedited review of a certificate of need application may simultaneously file a
letter of intent and an application with the commissioner. Upon making a
determination that the proposed project may be uncontested and does not
substantially alter services, as defined by rule, or upon making a
determination that the application relates to a health care facility affected
by bankruptcy proceedings, the commissioner shall issue public notice of
the application and the request for expedited review and identify a date by
which a competing application or petition for interested party status must be
filed. If a competing application is not filed and no person opposing the
application is granted interested party status, the commissioner may formally
declare the application uncontested and may issue a certificate of need without
further process, or with such abbreviated process as the commissioner deems
appropriate. If a competing application is filed or a person opposing the
application is granted interested party status, the applicant shall follow the
certificate of need standards and procedures in this section, except that in
the case of a health care facility affected by bankruptcy proceedings, the
commissioner after notice and an opportunity to be heard may issue a
certificate of need with such abbreviated process as the commissioner deems
appropriate, notwithstanding the contested nature of the application.

Sec. 5e. 18 V.S.A. § 9440(e) is amended to read:

(e) The commissioner shall
adopt rules governing procedures for the expeditious processing of applications
for replacement, repair, rebuilding, or reequipping of any part of a health
care facility or health maintenance organization destroyed or damaged as the
result of fire, storm, flood, act of God, or civil disturbance, or any other
circumstances beyond the control of the applicant, and of applications where
the health care facility is affected by bankruptcy proceedings, where the
commissioner finds that the circumstances require action in less time than
normally required for review. If the nature of the emergency requires it, an
application under this subsection may be reviewed by the commissioner only,
without notice and opportunity for public hearing or intervention by any party.

Sec. 6. 18 V.S.A. § 9444 is amended to read:

§ 9444. REVOCATION OF CERTIFICATES; MATERIAL CHANGE

The commissioner may revoke a
certificate of need for substantial noncompliance with the scope of the project
as designated in the application, or for failure to comply with the conditions
set forth in the certificate of need granted by the commissioner. In the
event that after a project has been approved, its proponent wishes to
materially change the scope or cost of the approved project, all such changes
are subject to review under this subchapter. If a change itself would be
considered a new health care project as defined in subsection 9434(a)section
9434 of this title, it shall be considered as material. If the change
itself would not be considered a new health care project as defined in subsection
9434(a)section 9434 of this title, the commissioner may decide not
to review the change and shall notify the applicant and all parties of such
decision. Where the commissioner decides not to review a change, such
change will be deemed to have been granted a certificate of need.

Sec. 7. 18 V.S.A. § 9445 is amended to read:

§ 9445. ENFORCEMENT

(a) Any person who offers or
develops any new health care project within the meaning of this subchapter
without first obtaining a certificate of need as required herein, or who
otherwise violates any of the provisions of this subchapter, shallmay
be subject to the following administrative sanctions by the
commissioner, after notice and an opportunity to be heard:

(1) The state shall not
issue acommissioner may order that no license or certificate
permitted to be issued by the department or any other state agency may be
issued to any health care facility to operate, offer, or develop any new
health care project in violation of this subchapter and without a
certificate of need or certificate of exemption issued pursuant theretofor
a specified period of time, or that remedial conditions be attached to the
issuance of such licenses or certificates.

(2) The state shall not
furnish from any reimbursement programcommissioner may order that
payments or reimbursements to the entity for claims made under any health
insurance policy, subscriber contract, or health benefit plan offered or
administered by any public or private health insurer, including the Medicaid
program and any other health benefit program administered by the state,
nor shall any entity chartered under the laws of this state or any person doing
business in the state provide reimbursement for any new health care project
offered or developed in contravention of the requirements of this subchapterbe denied, reduced, or limited, and in the case of a hospital that the
hospital’s annual budget approved under subchapter 7 of this chapter be
adjusted, modified or reduced.

(3)(b) In
addition to all other sanctions, if any person offers or develops any new
health care project without first having been issued a certificate of need or
certificate of exemption therefore, or violates any other provision of this
subchapter or any lawful rule or regulation promulgated thereunder, the
commissioner and health care providers or consumers located in the state shall
have standing to maintain a civil action in the superior court of the county
wherein such alleged violation has occurred, or wherein such person may be
found, to enjoin, restrain, or prevent such violation. Upon written
request by the commissioner, it shall be the duty of the attorney general of
the state to furnish appropriate legal services and to prosecute an action for
injunctive relief to an appropriate conclusion, which shall not be reimbursed
under subdivision (2) of this subsection.

(b)(c) After
notice and an opportunity for hearing, the commissioner may impose on a person
who knowingly violates a provision of this subchapter, or a rule or order
adopted pursuant to this subchapter or section 15 of Title 8, a civil
administrative penalty of no more than $40,000.00, or in the case of a
continuing violation, a civil administrative penalty of no more than
$100,000.00 or one-tenth of one percent of the gross annual revenues of the
health care facility, whichever is greater, which shall not be reimbursed under
subdivision (a)(2) of this section, and the commissioner may order the
entity to cease and desist from further violations, and to take such other
actions necessary to remediate a violation. A person aggrieved by a
decision of the commissioner under this subdivision may appeal the
commissioner’s decision to the supreme court.

Sec. 8. 18 V.S.A. § 9437 is amended to read:

§ 9437. CRITERIA

A certificate of need shall be
granted if the applicant demonstrates and the commissioner finds that:

(1) the application is consistent
with the health resource allocation plan;

(2) the cost of the project is
reasonable, because:

(A) the applicant's financial
condition will sustain any financial burden likely to result from completion of
the project;

(B) the project will not result in
an undue increase in the costs of medical care. In making a finding under
this subdivision the commissioner shall consider and weigh relevant factors
including:

(i) the financial implications
of the project on hospitals and other clinical settings, including the impact
on their services, expenditures, and charges;

(ii) whether the impact on
services, expenditures and charges is outweighed by the benefit of the project
to the public; and

Sec. 9.
EMERGENCY RULES; EFFECTIVE DATE; PROSPECTIVE REPEAL

(a) The commissioner may
adopt emergency rules to carry out the purposes of Sec. 5a of this act.

(b) This act shall take
effect on July 1, 2008, except that Sec. 5a of this act shall take effect on
passage, and Sec. 5e of this act shall take effect on July 1, 2009.

(c) Subsection (a) of this
section shall be repealed on June 30, 2009.